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[Federal Register Volume 77, Number 180 (Monday, September 17, 2012)]
[Proposed Rules]
[Pages 57037-57039]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22834]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 77, No. 180 / Monday, September 17, 2012 / 
Proposed Rules

[[Page 57037]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Doc. No. AMS-FV-12-0014; FV12-985-2 PR]

Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Change to Administrative Rules Regarding the Transfer 
and Storage of Excess Spearmint Oil

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on proposed revisions to the 
administrative rules prescribed under the marketing order regulating 
the handling of spearmint oil produced in the Far West. The marketing 
order is administered locally by the Spearmint Oil Administrative 
Committee (Committee). This rule would change the date by which a 
producer must transfer excess spearmint oil to another producer or 
deliver such oil to the Committee or its designees for storage from 
November 1 to December 1. This action would also change the date that 
the Committee must pool identified excess oil as reserve oil from 
November 1 to December 1. The proposed changes would be a relaxation of 
the handling regulations and are expected to benefit producers, 
handlers, and consumers.

DATES: Comments must be received by November 16, 2012.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the Internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Marketing Specialist, 
or Gary Olson, Regional Manager, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
Barry.Broadbent@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Laurel May, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Laurel.May@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Order No. 985 (7 CFR part 985), as amended, regulating the handling of 
spearmint oil produced in the Far West (Washington, Idaho, Oregon, and 
designated parts of Nevada and Utah), hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule invites comments on proposed revisions to the 
administrative rules prescribed under the order. This rule would change 
the date by which a producer must transfer excess spearmint oil to 
another producer or deliver such oil to the Committee or its designees 
for storage from November 1 to December 1. This rule would also change 
the date that the Committee must pool identified excess oil as reserve 
oil from November 1 to December 1. The proposed changes were 
unanimously recommended at a February 22, 2012, meeting of the full 
Committee.
    Section 985.56(a) of the spearmint order specifies that before 
October 15, or such other date as the Committee, with the approval of 
the Secretary, may establish, a producer, following notification of the 
Committee, may transfer excess oil to another producer to fill a 
deficiency in that producer's annual allotment. In addition, Sec.  
985.56(b) specifies that before November 1, or such other date as the 
Committee, with the approval of the Secretary, may establish, excess 
oil, not used to fill another producer's deficiency, shall be delivered 
to the Committee or its designees for storage. Section 985.57(a) 
provides that on November 1, or such other date as the Committee, with 
the approval of the Secretary may establish, the Committee shall pool 
identified excess oil as reserve oil in such manner as to accurately 
account for its receipt, storage, and disposition.
    In a rule published on October 30, 1980 (45 FR 71759), Sec.  
985.156 was added to the order's administrative rules and regulations, 
effectively changing the date by which the transfer of excess oil 
between producers to fill deficiencies must be completed from October 
15 to November 1.
    At the February 22, 2012 meeting, the Committee unanimously 
recommended

[[Page 57038]]

changing the date by which all transfers of excess oil between 
producers to fill deficiencies must be completed from November 1 to 
December 1. In addition, the Committee recommended changing the date by 
which all excess oil, not used to fill another producer's deficiency, 
must be delivered to the Committee or its designees for storage from 
November 1 to December 1. Lastly, the Committee recommended changing 
the date that the Committee must pool identified excess oil as reserve 
oil from November 1 to December 1.
    In its deliberations, the Committee commented that a number of 
factors have contributed to the need to establish later dates for the 
transfer, storage, and reserve pooling of excess oil. The largest 
factor driving the recommended change is the shift towards harvesting 
spearmint oil later in the year. Historically, the harvest of spearmint 
oil has concluded by the end of September. However, in recent years, 
many producers have extended the harvest of spearmint oil into the 
middle of October. This current trend towards harvesting later into the 
year has been facilitated by advances in the equipment, technology, and 
cultural practices employed by spearmint producers. While extending 
harvest further into October has benefited producers, it has also made 
the identification and transfer of excess oil prior to the current 
November 1 deadline increasingly difficult.
    In addition, after harvest is complete, many producers now deliver 
their spearmint to a handler to remove excess water from the spearmint 
oil in order to derive a ``dewatered'' net quantity of oil produced. 
This dewatering process can take up to several weeks to complete, 
further tightening the timeframe that spearmint producers must operate 
under to meet the current volume regulation deadlines.
    Lastly, many spearmint oil producers have diversified their farming 
operations and are typically involved in the harvest of other late 
bearing crops during the month of October. These producers may be 
preoccupied with their other farm obligations and may not have the time 
to review their spearmint production, ensure all paperwork is in order, 
make marketing decisions, and execute any transfers of excess oil prior 
to the current November 1 deadline.
    The Committee staff must account for all of the production, 
transfer, sale, and reserve pooling of spearmint oil before an accurate 
determination of the statistics can be compiled for the marketing year. 
The Committee believes that extending the deadline by which producers 
must transfer or store their excess oil, and that the Committee must 
pool identified excess oil, from November 1 to December 1 would have 
minimal impact on the Committee staff's ability to perform their 
required functions in a timely manner.
    The proposed changes are expected to benefit producers, handlers, 
and consumers of spearmint oil by ensuring that all spearmint oil 
eligible to enter the market under volume regulation is actually 
available to the market.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are 8 spearmint oil handlers subject to regulation under the 
order. In addition, there are approximately 32 producers of Scotch 
spearmint oil and approximately 88 producers of Native spearmint oil in 
the regulated production area. Small agricultural service firms are 
defined by the Small Business Administration (SBA) (13 CFR 121.201) as 
those having annual receipts of less than $7,000,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000.
    Based on the SBA's definition of small entities, the Committee 
estimates that two of the eight handlers regulated by the order could 
be considered small entities. Most of the handlers are large 
corporations involved in the international trading of essential oils 
and the products of essential oils. In addition, the Committee 
estimates that 15 of the 32 Scotch spearmint oil producers and 26 of 
the 88 Native spearmint oil producers could be classified as small 
entities under the SBA definition. Thus, a majority of handlers and 
producers of Far West spearmint oil may not be classified as small 
entities.
    The Far West spearmint oil industry is characterized by producers 
whose farming operations generally involve more than one commodity, and 
whose income from farming operations is not exclusively dependent on 
the production of spearmint oil. A typical spearmint oil-producing 
operation has enough acreage for rotation such that the total acreage 
required to produce the crop is about one-third spearmint and two-
thirds rotational crops. Thus, the typical spearmint oil producer has 
to have considerably more acreage than is planted to spearmint during 
any given season. Crop rotation is an essential cultural practice in 
the production of spearmint oil for weed, insect, and disease control. 
To remain economically viable with the added costs associated with 
spearmint oil production, most spearmint oil-producing farms fall into 
the SBA category of large businesses.
    Small spearmint oil producers generally are not as extensively 
diversified as larger ones and as such are more at risk to market 
fluctuations. Such small producers generally need to market their 
entire annual crop and do not have the luxury of having other crops to 
cushion seasons with poor spearmint oil returns. Conversely, large 
diversified producers have the potential to endure one or more seasons 
of poor spearmint oil markets because income from alternate crops could 
support the operation for a period of time. Being reasonably assured of 
a stable price and market provides small producing entities with the 
ability to maintain proper cash flow and to meet annual expenses. Thus, 
the market and price stability provided by the order potentially 
benefit the small producer more than such provisions benefit large 
producers.
    This proposed rule would change the date by which transfers of 
excess spearmint oil between producers to fill deficiencies in annual 
allotments must be completed from November 1 to December 1. This rule 
would also change the date by which all excess oil not used to fill 
deficiencies must be transferred to the Committee for storage from 
November 1 to December 1. Lastly, this rule would extend the date that 
the Committee must pool identified excess oil as reserve oil from 
November 1 to December 1.
    The Committee recommended extending the dates to give producers 
more time to assess the quantity of spearmint oil they produced 
relative to their annual allotment, to determine if there is a 
deficiency or an excess of such oil, and to make decisions regarding 
any transfers of oil. This action is expected to benefit producers, 
handlers, and consumers by ensuring that the market is adequately 
supplied with spearmint oil. The authority for this action is provided 
in Sec. Sec.  985.56 and 985.57 of the order.

[[Page 57039]]

    At the February 22, 2012, meeting, the Committee discussed the 
impact of the proposed changes on handlers and producers. The proposed 
action would be a relaxation of the current handling regulation, 
allowing an additional 30 days for industry participants to fully 
supply the market with the total amount of spearmint oil allotted under 
the volume regulation provisions of the order. The benefits of this 
rule are not expected to be disproportionately greater or less for 
small handlers or producers than for larger entities.
    The Committee discussed alternatives to these proposed changes, 
including making no changes at all, changing the dates but keeping them 
within the month of November, and extending the dates further into 
December or into January. The Committee thought that maintaining the 
dates in the current regulations would not be responsive to the 
changing production practices of the industry. In addition, they felt 
that the dates should be extended at least 30 days for the change to be 
meaningful. However, the Committee believed that extending the dates 
any further than the proposed dates would affect the Committee's 
ability to establish accurate reports for the completed harvest season 
in a timely manner. The Committee members unanimously agreed that 
changing the dates for transferring, storing, and pooling excess oil 
from November 1 to December 1 addressed the industry's current needs 
without negatively impacting the operation of the Committee.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule would change the date by which excess oil must 
be transferred between producers to fill annual allotment deficiencies 
or delivered to the Committee or its designees for storage from 
November 1 to December 1. In addition, the rule would change the date 
the Committee must pool identified excess oil as reserve oil from 
November 1 to December 1. The rule would be a relaxation of the volume 
regulation provisions of the order. No changes in the reporting or 
recordkeeping requirements would be necessary as a result of this 
action. Accordingly, this proposed rule would not impose any additional 
reporting or recordkeeping requirements on either small or large 
spearmint oil producers or handlers. As with all Federal marketing 
order programs, reports and forms are periodically reviewed to reduce 
information requirements and duplication by industry and public sector 
agencies. Furthermore, USDA has not identified any relevant Federal 
rules that duplicate, overlap, or conflict with this proposed rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    In addition, the Committee's meeting was widely publicized 
throughout the spearmint oil industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the February 
22, 2012, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit comments on this proposed rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Laurel May at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 985

    Marketing agreements, Oils and fats, Reporting and recordkeeping 
requirements, Spearmint oil.

    For the reasons set forth in the preamble, 7 CFR part 985 is 
proposed to be amended as follows:

PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL 
PRODUCED IN THE FAR WEST

    1. The authority citation for 7 CFR part 985 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Revise Sec.  985.156 to read as follows:

Sec.  985.156  Transfer of excess oil by producers.

    (a) Pursuant to Sec.  985.56(a), before December 1 of each 
marketing year, a producer, following notification of the Committee, 
may transfer excess oil to another producer to enable that producer to 
fill a deficiency in that producer's annual allotment.
    (b) Pursuant to Sec.  985.56(b), before December 1 of each 
marketing year, excess oil not used to fill another producer's 
deficiency shall be delivered to the Committee or its designees for 
storage.
    3. Add Sec.  985.157 to read as follows:

Sec.  985.157  Reserve pool requirements.

    Pursuant to Sec.  985.57(a), on December 1, the Committee shall 
pool identified excess oil as reserve oil in such manner as to 
accurately account for its receipt, storage, and disposition.

    Dated: September 12, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-22834 Filed 9-14-12; 8:45 am]
BILLING CODE 3410-02-P
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